How self-storages can limit the financial consequences of the coronavirus crisis
[This blog is a translation of the original Dutch version published on May 21, 2021.]
In our previous blog on the impact of Covid-19 on the self-storage sector, we outlined the financial impact of the coronavirus crisis. In present blog we shift the focus to the actions that self-storage operators could take to limit any negative financial impact. We distinguish two situations.
What about defaulting tenants?
Prevention is the best cure(literally and figuratively). For example, it helps to properly inform tenants at the time of concluding the rental agreement about the payment terms as well as the consequences of failing to meet a payment on time.
Direct debiting, if possible, is preferred and can be presented to tenants as a means of avoiding penalties in case of late payments. Follow-up of payments becomes even more important. Verification of contact details when drawing up the lease agreement is advised.
Reminder calls have a personal touch and allow for anticipation and a targeted search for a solution, together with the tenant in case of payment difficulties. It is important to maintain a balance between the right to be paid and understanding the current situation in which a tenant may find himself.
In any case, it is worthwhile to read your current rent collection policy and possibly update it in light of the corona pandemic (source: Inside Self-Storage).
My occupancy rate is falling, and now?
What if the financial consequences result in a decrease in occupancy due to the lack of new tenants? This is a more fundamental problem than defaults. Adjusting your own rental conditions (read: lowering rents) may offer a temporary solution, but is neither structural nor profitable in the long term.
We therefore urge self-storage operators to think ahead. As in so many sectors since the pandemic, the self-storage sector will also know an era pre and post coronavirus. The pandemic accelerated the evolution of society. Governments, companies and consumers developed new habits in a very short timeframe and these new habits are here to stay. Just think of remote work, working only by appointment and the boost in e-commerce.
Consumers expect to find all relevant information online and to be able to make purchases instantly. In Belgium, for example, internet traffic increased by 60% in 2020 compared to 2019 (source: Telenet). Digitalization can no longer be held back, neither in the world of self-storage. Book Your Box already offers self-storage operators the possibility to reach new tenants through an online channel.
Next to digitalization, personal space and (hand) hygiene are here to stay. It is important for the operator to show (potential) tenants that the facility pays sufficient attention to these elements, even after the current coronavirus restrictions are lifted. It is likely that tenants will start to value this and that it will become part of their customer experience. By anticipating these evolutions, a self-storage operator distinguishes itself from its competitors, which will not go unnoticed by tenants.
Self-storage operators should realize that 2021-2022 is a transition period and that the sector, although so far spared from a negative Covid-19 impact, is not immune to the many changes the pandemic has set in motion. Key message is to evolve with it. A partnership with Book Your Box offers self-storage operators a means to present themselves to an ever-increasing online audience.
Are you looking for an additional, online marketing channel to find new tenants?
Register now on Book Your Box!